In March, we reported that Severn Bank (NASDAQ: SVBI), an FDIC-insured holding company based Annapolis with six branches in Anne Arundel County, revealed for the first time that it is serving the cannabis industry in a substantial manner. At year-end, it reported $19.2 million in cannabis industry deposits, or 3.2% of its total deposits, and that it had made loans totaling $11.9 million at year-end, or 1.8% of all loans.
The company filed its 10-Q for the second quarter today and detailed its expansion over the past six months. The bank now reports deposits of $27.8 million (4.5% of deposits) and has loan balances of $15.3 million (2.2% of all loans). It also reports that medical cannabis customer accounts were primarily responsible for its $566,000 increase in deposit service charges in the first half of the year.
Severn continues to warn investors of potential risks it assumes in working with the cannabis industry:
The cannabis industry continues to struggle generally with access to banking, including being able to deposit cash. Many companies and banks and credit unions are reluctant to speak publicly about the topic, and only a handful of publicly-traded companies appear to cater to the industry. First Green Bank in Florida abruptly exited the business just ahead of its acquisition by publicly-traded Seacoast Banking Corp, which didn’t want the exposure to the risks.